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Opinion

East County
Wednesday, Mar. 23, 2011
4 years ago

TALLAHASSEE: Political pension punt

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by:
Rod Thomson
Editor-at-Large

If leadership is best conducted by example, a key Florida Senate committee on pensions is conducting downright pathetic leadership and having real trouble being serious about the state’s long-term financial woes.

This is a problem, especially now, because pension promises for public employees are coming due from the pockets of all of us who do not have such pensions.

Those promises are extracting $3 billion annually from taxpayers and contributing to the state’s weakening financial condition. Plus, taxpayer support will likely increase in coming years without serious reform.

Here’s the way it works right now, and it is sweet indeed if you are a government worker and not just a government funder:

Most government employees are covered under a traditional pension plan that guarantees their benefits after retirement indefinitely. Of course, this option has gone the way of the dinosaurs in the private sector, where most employees use a 401(k) plan to which they contribute.

Public employees, in contrast, can retire with full benefits after 30 years and are guaranteed a 3% annual increase in their pension payments. Further, they contribute nothing to their pensions. Zero.

Public employees in most states still have pensions, as politics is politics everywhere. But Florida TaxWatch reports that public employees in other states must contribute an average of 5% of their salaries to their pensions.

So reasonably enough, Gov. Rick Scott proposed that public employees covered by the Florida Retirement System — which includes non-state employees such as teachers, police and firefighters — contribute 5% as they do in other states. That part of his proposal would save about $1 billion per year.

Scott also proposed putting new employees into 401(k) plans and limiting cost-of-living increases to the rate of inflation. That would save hundreds of millions more.

From the hysterical responses to this common-sense proposal, you’d think he had required every family to give up its first born.

So the Republican-dominated Senate Governmental Oversight and Accountability Committee played raw politics. It approved a bill that would require teachers, police, firefighters and other employees who earn more than $40,000 annually to pay into the pension plan only up to 2% of their salary. (Those under $40,000 would pay nothing.) Those who make more than $75,000 plus all elected officials, would pay up to 4% of their salary toward their pension. No one would pay the 5% other states do.

Further, these pension contributions would only last as long as the Florida Retirement System runs a deficit. If the fund runs a surplus, then the contributions would stop, reverting to the sweetness of zero.

This may be considered a step forward, but it’s a tiny, completely political step, done without any knowledge of how much money would actually be saved.

Yes, senators just reduced percentages and changed rules arbitrarily for political cover. One tip-off of the worthlessness of the “reforms” in this bill is the head of the state police union called the bill “pretty nice” — compared to his description of Scott’s proposal as “pretty ugly.”

When a public-sector union calls reforms pretty nice, you just know the politicians have punted the overall public good again. That is disturbingly irresponsible, mirroring similarly actions in Washington, D.C., where politicians keep punting the necessary decisions down the road for personal political gain.

This must stop.

Scott had proposed realistic changes to the pension system that would have cost state employees more but also would have moved them closer to the entire private sector, which ultimately is paying for this plan. Completely reasonable, and therefore apparently completely objectionable to the political class.

Here’s a fine example from Sen. Mike Fasano, a New Port Richey Republican: “Unlike the governor, this bill does not balance the budget on the backs of state workers,” Fasano said, sounding every bit like your typical, demagoguing class-warfare Democrat.

Even more telling, when an amendment was proposed to reduce the rate at which politicians accrue their pension benefits to the same level as police and firefighters, the committee voted “nay.” Remember, legislators are only part-time employees.

This cannot keep up. We encourage more fortitude to do the right thing in the full Senate and House. Lawmakers should institute real and lasting change we can afford, closer to what the governor proposed. Try thinking of all of all Floridians, not just government employees.

DEMERIT PAY
There is ever more handwringing in Tallahassee whenever the status quo is challenged. That is doubly so for government workers and their increasingly powerful unions.

So when the Legislature passed requirements for performance-based pay for teachers, the reaction was predictable. The media dutifully reported a public “outcry” as though someone was horribly wronged. Democrats howled to please their union financial backers.

Now the latest twist is to charge that the bill requiring exceptionally good teachers to get more money is an “unfunded mandate,” which is something indeed Tallahassee has been known to do — legislate costly requirements on local jurisdictions but not provide funding.

Manatee County Schools Superintendent Tim McGonegal, a supporter of merit pay, said the plan would cost money, and the Legislature approved no money for it. OK.

Here is a suggestion that will make some people’s skin crawl but is perfectly reasonable: Take more money from the worst teachers.

If you can identify the best teachers for merit pay, then indentify the worst ones for de-merit pay and simply shift the funds. Unions make it impossible to get rid of bad teachers, but perhaps they can be persuaded to leave by other means. Students are performance based. Why not teachers?

Of course, the unions would howl, but let them.

If teachers are really the most important people in society, then we should make sure we have and keep the best and dump the worst. Otherwise, the claim is a sham.